A Company Has a Current Ratio of 2

question 142

Multiple Choice

A company has a current ratio of 2.0 and a quick ratio of 1.5.Assume the company then paid previously declared dividends in the amount of $20,000.Which of the following statements is true?

• A)The current ratio will decrease and the quick ratio will decrease.
• B)The current ratio will decrease and the quick ratio will not change.
• C)The current ratio and the quick ratio will not change.
• D)The current ratio will increase and the quick ratio will increase.

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Definitions:

Correlation

A statistical measure that indicates the extent to which two variables fluctuate together, showing whether and how strongly pairs of variables are related.

Variance Accounted

The proportion of total variation in a dataset that is explained by a statistical model.

Correlation

A statistical measure that expresses the extent to which two variables change together; indicating the strength and direction of a relationship.

Coefficient of Determination

A statistic that indicates the proportion of the variance in the dependent variable predictable from the independent variable(s).